January 2012

No man is an island. Economics is based on that fact. You can’t make an exchange, and markets cannot emerge, with solitary people leading solitary lives. Evolution bears this out. Our predecessors, from at least Australopithecus on down, lived in bands and tribes. Not alone. They lived, loved, ate, fought, and died together. We are evolved to need each other.

Rousseau, who died over 70 years before Darwin’s Origin of Species, thought differently. His Original Man in the state of nature assumes away our innate social tendencies. From his false premises come many of his false conclusions:

He [Rousseau] begins with a portrait of natural man as a solitary animal devoid of reason and speech, a being whose limited needs can be easily satisfied without depending on anyone, whose soul is restricted to the sole sentiment of his existence without any idea of the future, as near as it may be.

Robert Zaresky and John T. Scott, The Philosophers’ Quarrel: Rousseau, Hume, and the Limits of Human Understanding, location 381 in the Kindle edition.

From that miserable Rousseauian Eden, we are fallen. Thank goodness.

Deirdre McCloskey’s Great Fact is the leaps and bounds that human well-being has made over the last 200 years. The improvement is a factor of at least 16 in monetary terms, and as much as 100-fold when accounting for the improved quality of goods. Think of the difference between a CD and an iPod. Not 16 or 100 percent; 16 or 100-fold. That’s huge.

The improvement is so huge that she believes the Great Fact is the most important event in human history since the Agricultural Revolution asserted itself around 10,000 years ago. And the best news about the Great Fact should bring cheer to anyone who holds a place in their heart for the poor:

In statistics and in substance the very poorest have benefitted the most. Robert Fogel, a careful student of such matters, notes that “the average real income of the bottom fifth of the [American] population has multiplied by some twentyfold since 1890, several times more than the gain realized by the rest of the population.” The bottom 10 percent have moved from undernutrition to overnutrition, and from crowded slum housing to uncrowded slum housing, and from broken-down buses to broken-down automobiles.

Deirdre McCloskey, Bourgeouis Dignity, p. 72.

There’s still a ways to go, obviously. So let’s keep it going. But anyone who denies the significance of the massive gains already made contributes nothing towards the noble cause of eradicating global poverty, and in fact poisons the project.

Thanks to the Center for Class Action Fairness, courts are finally enforcing safeguards against the diversion and misuse of class-action lawsuit settlements, which all too often have been used to enrich cronies of trial lawyers and pet projects of the trial judge rather than to benefit the consumers in whose name the class action was brought. In Nachsin v. AOL, Inc., the Ninth Circuit Court of Appeals struck down the diversion of class-action settlement money to  local Los Angeles charities unrelated to the class or the claims of a national class-action lawsuit. Ted Frank of the Center for Class Action Fairness represented the successful objecting consumer. The court disapprovingly noted that “While the donations were made on behalf of a nationwide plaintiff class, they were distributed to geographically isolated and substantively unrelated charities.” Among the charities that improperly received money was a charity with ties to the trial judge’s own family, leading to the objector’s argument that “the district court judge should have recused herself given her husband’s position as a director on the board of one of the charity beneficiaries, the Legal Aid Foundation of Los Angeles.”

As the appeals court noted, judges have often wrongly used class-action settlements to enrich groups that have nothing to do with consumers’ rights, like the ACLU: “courts have awarded cy pres distributions to myriad charities which, though no doubt pursuing virtuous goals, have little or nothing to do with the purposes of the underlying lawsuit or the class of plaintiffs involved,” such as “awarding $2 million from an antitrust class action settlement to fifteen applicants, including the San Jose Museum of Art, the American Jewish Congress, a public television station, and the Roger Baldwin Foundation of the American Civil Liberties Union of Illinois.”

As George Krueger noted in The Wall Street Journal in “Our Class-Action System is Unconstitutional” (8/6/08), trial judges have “been known to order a distribution to some place like their own alma mater or a public interest organization that they happen to favor.” As Adam Liptak of the New York Times noted in 2007, “Lawyers and judges have grown used to controlling these pots of money, and they enjoy distributing them to favored charities, alma maters and the like.”  The Ninth Circuit’s ruling puts the brakes on this insidious practice.

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Thomas Erskine defended Thomas Paine after authorities decided to persecute him for the radical ideas contained in his Rights of Man. Here, Erskine tells a story that explains to Paine’s prosecutors why someone who threatens force during an argument is almost surely wrong:

You must all remember, gentlemen, Lucian’s pleasant story: Jupiter and a countryman were walking together, conversing with great freedom and familiarity upon the subject of heaven and earth. The countryman listened with attention and acquiescence while Jupiter strove only to convince him; but happening to hint a doubt, Jupiter turned hastily around and threatened him with his thunder. ‘Ah, ha!’ says the countryman, ‘now, Jupiter, I know that you are wrong; you are always wrong when you appeal to your thunder.’

Quoted from J.B. Bury, A History of Freedom of Thought, pp. 130-31.

He’s right. An argument can only truly be won on the merits.The world would be a better place if more people realized that.

This quote from friend-of-CEI Matt Ridley is too good not to share. Something to be thankful for on Thanksgiving:

Ask how much artificial light you can earn with an hour of work at the average wage. The amount has increased from 24 lumen-hours in 1750 BC (sesame oil lamp) to 186 in 1800 (tallow candle) to 4,400 in 1880 (kerosene lamp) to 531,000 in 1950 (incandescent light bulb) to 8.4 million lumen-hours today (compact fluorescent bulb). Put it another way, an hour of work today earns you 300 days’ worth of reading light; an hour of work in 1800 earned you ten minutes of reading light.

Matt Ridley, The Rational Optimist, p. 20.

Post image for Regulation of the Day 200: Flying Food

Millions of Americans are taking to the skies to spend time with their families over Thanksgiving. Many of them will be carrying leftovers on their return trips. Fortunately, the TSA is fully prepared to defend the airways against terrorist turkeys and rogue desserts. Here is a list of food and other holiday-themed items that run afoul of the TSA’s 3-1-1 rule:

Cranberry sauce, creamy dips and spreads (cheeses, peanut butter, etc.), gift baskets with food items (salsa, jams and salad dressings), gravy, jams, jellies, maple syrup, oils and vinegars, salad dressing, salsa, sauces, soups, wine, liquor and beer.

That means you’ll have to put them in checked baggage if you have a decent amount. They are far too dangerous to bring on the plane in a carry-on.

There are also specific guidelines for pies and cakes:

Note: You can bring pies and cakes through the security checkpoint, but please be advised that they are subject to additional screening.

I feel safer already.

Post image for Don’t Fear the Feast: Pass the Canned Cranberry Sauce, Green Beans, and Gravy!

It seems like the leftist activists don’t want anyone to enjoy life. They’d rather we be fraught with worry. During the weeks and days leading up to Thanksgiving Day, they’ve issued bogus reports on why Americans should fear their holiday feast.

“Study finds chemical BPA in popular Thanksgiving canned foods,” says the Los Angeles Times. The story cites a study released by anti-chemical activists at the Breast Cancer Fund. “The organization tested four cans of each of the following: Campbell’s Cream of Mushroom Soup, Campbell’s Turkey Gravy, Carnation Evaporated Milk, Green Giant Cut Green Beans, Libby’s Pumpkin and Del Monte Fresh Cut Sweet Corn, Cream Style,” reports the Los Angeles Times.

You might expect such sensationalism from the Los Angeles Times, but what about the Journal of the American Medical Association (JAMA)? JAMA also appears all too willing to take advantage of the holiday news hook to promote its publication of a study on BPA in canned goods. The new study appears in JAMA’s print magazine dated November 23/30, 2011 — Thanksgiving Day! the Thanksgiving issue. An abstract of the story is already posted on their website, which has garnered media attention for the publication by linking the study to turkey day.

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The Hill recently ran my letter to the editor responding to Sen. Tom Harkin’s column, “Republican attacks on workers’ rights won’t create jobs.” I make the case against the NLRBs overreach of power in the workplace:

A recent op-ed in The Hill by Sen. Tom Harkin (D-Iowa) (“Attacks on workers’ rights won’t create jobs,” Nov. 15) highlights the need to scale back government intervention.

Sen. Harkin’s grievance against Republicans unveils his paternalistic view of government, insisting Congress will find solutions, decide the haves and have-nots and get Americans back to work. The only impediment is Republicans attacking the National Labor Relations Board and not signing President Obama’s jobs bill. Government would fix the economy if Republicans let it.

Foregoing Sen. Harkin’s fallacy that congressional action will move America forward, he narrowly focuses on moving special-interest groups in America forward.

Republican labor policies have focused on providing all employers and employees rights. The NLRB’s regulations and court decisions have stacked the deck in favor of organized labor. Sen. Harkin, in agreement with the NLRB, has decided that union workers, only 11.9 percent of workforce, are how America should move forward.

Sen. Harkin, in America, the land of the free, individuals are responsible for their own destiny. Free individuals do not rely on government to determine winners and losers. To move America forward, government must return to its intended role of umpire withstanding the urge to dictate the game.

From Trey Kovacs, policy analyst at the Competitive Enterprise Institute, Washington D.C.

Have a listen here.

What is the single most expensive regulation of all time? Energy Policy Analyst William Yeatman has one candidate: the EPA’s proposal to regulate mercury emissions from coal-powered plants. If it passes, the regulation would cost at least ten billion dollars per year to benefit a very small group of people: pregnant women who have subsistence-level income, and eat mostly large fish caught in inland freshwater bodies.

In Japan, 6-year-old children are not only allowed to ride the train by themselves, but are eligible for a special fare. Not so in America, where Amtrak has now raised the age that children can ride the train by themselves from age 8 to age 13, effectively barring many working-class children from seeing their father (or non-custodial parent) after a divorce or parental break-up (or visiting their grandma). In America, unlike Japan, children are expected to be chained to their parents to prevent the one-in-a-million chance that something bad will happen to them if they are allowed a little freedom. Could the greater Japanese belief in children’s individual responsibility have something to do with how much better Japanese kids do on tests?

Amtrak admits that it had no experiences with anything bad happening to unaccompanied 8- to 12-year-olds who rode it, it just banned them out of an “abundance of concern” — that is, a baseless fear about safety. But taking away children’s mobility and independence is not “safe,” but deadly. Kids are getting obese as they are kept inside playing video games by busy parents, rather than being allowed to roam the neighborhood unaccompanied, which society used to permit. When I was in second grade, I and my twin brother would play outside for hours unsupervised, walking miles from our home in the woods and on our street, and getting lots of good exercise. Today, this would be considered child neglect by our parents, even though my father was depicted in a front-page obituary in the local paper as a model citizen. The home-habitat of the average child — the area in which they are allowed to travel on their own — has shrunken to one-ninth of its former size as parents are expected to be helicopter parents (and even rewarded for it with sole custody when fighting over custody of a child in the aftermath of a divorce).

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